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AI Boom Fuels India's Computing Giants
28 Oct
Summary
- Demand for AI computing power is rapidly increasing.
- Two Indian firms, E2E Networks and Netweb Technologies, are expanding capabilities.
- Both companies are key players in India's growing AI and HPC infrastructure sector.
Demand for computing power, driven by AI adoption, is outstripping supply, creating opportunities for specialized infrastructure providers.
In India, government initiatives like the IndiaAI Mission are supporting domestic computing infrastructure. This, coupled with demand for private cloud and data localization, is fostering growth for companies like E2E Networks and Netweb Technologies.
E2E Networks reported robust Q2FY27 results, with revenue up 410.8% year-on-year to ₹223.8 crore and achieving a net profit of ₹73 crore. The company is expanding its GPU fleet, including NVIDIA Blackwell B200 GPUs, and secured a ₹1,000 crore binding agreement with an Indian sovereign AI company through June 2029.
Netweb Technologies, an OEM, specializes in high-performance computing and AI systems. The company targets ₹4,000 crore revenue for FY27, with a confirmed order book of ₹2,629 crore. Its Q2FY27 revenue grew 335.7% year-on-year to ₹1,323.3 crore, with AI systems contributing 58.4% of this revenue.
Both companies are trading at a premium valuation, with Netweb showing stronger return ratios (ROCE 37.5%, ROE 32.8%) compared to E2E Networks (ROCE -0.5%, ROE -1%). Future growth for E2E depends on sustaining high EBITDA margins, while Netweb must manage rising component costs amid strong demand.
